The AI Industry Is Lying to You

https://www.wheresyoured.at/the-ai-industry-is-lying-to-you/

by spking • 4 months ago

166 80 4 months ago

52-6F-623• 4 months ago

Pointed and excellent.

But I wouldn't hold my breath waiting for introspection from that camp. It seems that AI maximalists, like so many other players these days, see it as end-game time. There are no bounds or rules: pick a side, and go. And then eat the rest.

Sure, not everyone sees it this way. There are highly competent, human actors working in their joy toward a better way forward with all of it. But I don't think you'll find that spirit unbridled inside any profit-seeking corporation of any significant standing (though I would be happy to be proven wrong). If it existed there, it is being choked out by selfishness and survivalism.

And then there's Thiel and ilk waxing eschatological, adding a whole other layer to the scheme.

awakeasleep• 4 months ago

An analysis of datacenter commitments and GPU purchasing through how much power they will demand vs how much is available.

As someone who only has a passing interest, there isn't anything distilled enough in this article for me to comment on as the central point. Everyone seems to be reporting impossible numbers, and buying dramatically more hardware than they can install in a reasonable timeframe given the pace of the industry.

fred_is_fred• 4 months ago

Railroads, e-commerce, and AI - all useful, all were (or may be) credit/stock bubbles. Railroads however have a much better depreciation schedule than GPUs.

tootie• 4 months ago

He isn't arguing that AI is useless. Only that Nvidia is propping up a massive financial deck of cards and that all the giant numbers being tossed around are fantasies.

woleium• 4 months ago

It’s supply and demand, as long as the demand is there the numbers can be maintained

simianwords11• 4 months ago

He isn't arguing that AI is useless.

This is what he said in 2024

-----

The “iPhone moment” wasn’t a result of one thing, but a collection of different bits that formed an obvious whole — one device that did a bunch of things really, really well.

LLMs have no such moment, nor do they have any one thing they do well, let alone really well. LLMs are famous not for their efficacy, but their inconsistency, with even ardent AI cultists warning people not to trust their output

https://www.wheresyoured.at/never-forget-what-theyve-done/

consumer4514• 4 months ago

Something I heard a person say recently:

Isn't it weird how there is no huge industry pushback on all this new AI datacenter power need, as there was about electrifying vehicles?

givemeethekeys• 4 months ago

Was there a big industry push back against looms, tractors, computers, or the internet?

throwaway5752• 4 months ago

There used to be a social contract, but now there are so many people that it's a problem that there is no work for the displaced. The leverage between the very small number of people with vast amounts of capital and a large number of people with very little capital or leverage - this is a societal dynamic that has existed before in the world. There is historical precedent for this, and it's probably worth paying very close attention to what comes next if you are a very wealthy person pushing against all forms of wealth redistribution.

bluGill• 4 months ago

Tractors didn't get it because about the time they became useful for most farmers WWII was pushing the need for less men on the farm so they could go to war. There were tractors before then, but the previous ones had big negatives if you were not a much larger farm than most were then.

baggachipz2• 4 months ago

Almost as if that "industry pushback" argument was not made in good faith? I wonder who would be against electric vehicles?

supriyo-biswas• 4 months ago

I wonder who would be against electric vehicles?

The fossil fuel industry ?

0gs• 4 months ago

i see him brag about how long these astroturf joints are on bluesky. had been a while since i'd tried to actually scroll through one and it makes sense now: so much more space to spawn subscription promos. better offline indeed

redwood• 4 months ago

The article takes an odd turn in the second half and seems to veer from a very interesting deep-dive into how a lot of backlogged US data center production may correlate with GPU "slippage" via questionable resellers and GPU rental outfits to China

ramesh31• 4 months ago

Ah yes, now that the rails are all built what could we possibly do next?

soumyaskartha• 4 months ago

The lying is not even subtle anymore. The gap between the demo and the product has never been wider and people are starting to notice.

motorpixel• 4 months ago

Someone please correct my math.

The article says 240 Gigawatts of capacity is allocated for AI datacenters.

New York City draws about 10 Gigawatts in the hottest months of the year due to extra load from AC use.

So am I understanding correctly that these people want to foist upon the power grid 24 NYCs?

mekael• 4 months ago

I’ve never thought of it in terms of “how many new metropoli(sp) are being added”, but it seems like a deceny unit of measure. If we use the average of 6gw, we’re adding essentially 40 nyc’s.

ua709• 4 months ago

It's probably more correct to say that there are some people who project that 240GW of additional power will be required by data centers in the near future.

Yes, that number is absurd, and data centers will certainly need to make do with less, regardless of actual requirements.

cyberge99• 4 months ago

That also fails to take efficiency and cost optimization into account. Just parsing out salutations and please/thank you from AI requests reduces utilization and that’s not really even intense optimization.

kerblang• 4 months ago

Earlier today on the radio I heard Houston TX was 20 GW at peak load.

Texas is [d]oing its best to build as many datacenters & power plants as possible. They were describing it as "Texas will have more datacenters than anyplace else in the world." This was public radio, but everybody's taking a hit on the ol' AI pipe nowadays.

Ekaros• 4 months ago

Which running 24/365 would correspond to about half of total electricity consumption of USA...

At cost of 0.01 per kwh would be 21 billion... And electricity generally is not that cheap everything considered...

wespiser_2018• 4 months ago

Very good points.

My current model for understand for how AI will scale out is that we'll move through the following choke points:

AI chip makers -> Data center infra and construction -> regional power companies

Right now we're firmly in the "AI chip makers" part of the expansion, with everything else in the beginning stages. AI is useful, but whether it's hyped or not, it's hard to deny that not being able to build and power data centers will impact how this plays out.

simianwords11• 4 months ago

I think the AI industry needs intelligent skeptics that keep the hype in check and ground us in reality.

But Ed Zitron is not it. Here's an example [1] of him fumbling on simple arithmetic. He's also perpetually bearish without any sense of principles on his message.

This is what he wrote in 2024 [2]

You can fight with me on semantics, on claiming valuations are high and how many users ChatGPT has, but look at the products and tell me any of this is really the future.

I think the industry really needs someone better with principles.

[1] https://x.com/binarybits/status/2034376359909130249

[2] https://www.wheresyoured.at/never-forget-what-theyve-done/

Edit: here's another example https://x.com/blader/status/2031216372169191678

I get that people make mistakes but it really does seem like there are no principles behind the guy. It seems like he can write whatever.

CodingJeebus2• 4 months ago

I personally think the fact that it's an indie reporter like Ed Zitron diving into this says a lot about the state of tech media broadly. Reminds me a bit of how sports journalism works nowadays: nobody wants to call out industry leaders for fear of losing access, because losing access is career suicide.

simianwords11• 4 months ago

False. The current mainstream media outlets are by far the more anti technology than pro. It is unclear why you think journalists fear losing access when the status quo is opposing tech.

52-6F-623• 4 months ago

I think you should focus on the claims in this article. There are plenty of principles espoused within.

Smearing his character without directly addressing those just stinks the place up.

estimator7292• 4 months ago

There's throwing mud and then there's pointing out the mud already flung all over the walls

mmiliauskas• 4 months ago

I have been burned in the past by siding with people who give kitchen-sink type of arguments. So I would not bet my money on things he says.

That being said. Since COVID there seems to be an ongoing and worsening DOS attack. Everybody who have access to media are lying. And we know they are lying! The craziest part is not only that they are getting away with it (so far at least), but this is becoming embraced, standardized and legalized. Which is fucking crazy.

I like listening to Ed's interviews, mainly because he is DOSing back.

packetlost• 4 months ago

I briefly listened to one of his podcasts, but the over-the-top, worst-interpretation-possible coverage was just... bleh.

cryzinger• 4 months ago

It seems like he can write whatever.

Not incidentally, he's a PR guy by trade--who still runs his own PR firm! And that firm has done PR for AI companies!

https://archive.ph/2025.10.27-195752/https://www.wired.com/s...

I'm firmly on the skeptic side of the AI skeptic/booster divide, but I wish we had better mouthpieces on the skeptic side. I get the feeling that Zitron is more concerned with getting his newsletter numbers up than anything else.

joshcsimmons2• 4 months ago

Agreed. I'm trying to speak up about this more as an engineer https://youtu.be/cJYAK6csXso

throw-233• 4 months ago

Ed can come across as agitated and shrill, and I never stop picturing him as exactly like Jude Law's character in Contagion. But. He's still an important counterpoint to the unexamined mainstream junk, which says more about the world than about him or his style. As we've seen play out with other areas of discourse, the middle shrinks, we're forced into a dialectic tug of war between absurdly polarized extremes, and it all comes to crisis. We might rediscover caution, epistemic humility, compromise and middle-ground, but only after rising absurdity and then some kind of punishment

simianwords11• 4 months ago

You make good points at the end but I don't know why it is important to be unprincipled about it?

He's still an important counterpoint to the unexamined mainstream junk, which says more about the world than about him or his style.

mvdtnz• 4 months ago

I've listened to his podcast a couple of times. I never use this term but for Ed I make an exception: he is a hater. He is making a living out of being a hater.

QuantumGood• 4 months ago

He's a PR professional who has literally worked for AI companies, and it feels more like he's chasing newsletter engagement than making a coherent argument. The agitated ranting definitely overshadows the rest.

dminik2• 4 months ago

I've had to reread the first tweet a bunch, but I don't think Ed is wrong there.

As far as I can tell, in February Anthropic projected their 2026+ annual revenue at $14 billion dollars, based on a month long period. If you added the numbers presented together for the 3 years of time, you would end up at $6 billion dollars of revenue.

But, a month later in a court document they only mention "exceeding $5 billion dollars". For the entire time the company has been in business.

Additionally, the month long period with ~1B would account for a fifth of the total revenue. That's eyebrow raising.

simianwords11• 4 months ago

I meant this one for arithmetic https://x.com/binarybits/status/2034378777745141799

cyclonereef• 4 months ago

His articles conflate quality with quantity. An aggressive edit with a more coherent structure would improve the message and sound less like a stream of consciousness rambling. Advertising his newsletter as "over 7000 words" is like bragging about LOC, it's an impressive number but doesn't itself indicate whether it's a necessary amount or if it's useful.

Unfortunately though I can't really find anyone else looking at this same information, so for now I have to wade through these newsletters to pick the gold from the shit

joshcsimmons2• 4 months ago

I'll plug my own content as a response to Ed. I have worked in engineering for a while now. I did code and continue to. How a PR guy has become the face of this story is beyond me https://youtu.be/cJYAK6csXso

FWIW I have been trying to interview Ed about this for ages but he has ignored all of our requests.

pllbnk• 4 months ago

Here's an example [1] of him fumbling on simple arithmetic.

If you read just the _next_ paragraph after what this Timothy B. Lee conveniently screenshoted, you will find Ed Zitron saying this:

--- The exact quote from the affidavit is that “...[Anthropic] has generated substantial revenue since entering the commercial market—exceeding $5 billion to date,” and while boosters will say “uhm, it says “exceeding,” if it were anything higher than $5.5 billion Anthropic would’ve absolutely said so. ---

I checked archive.org and Ed's article wasn't edited and it was saying that from the very beginning so I can only assume malicious misinformation presented by the X'er. So, you are saying he fumbled at simple arithmetic while showing the source which skips the half where he is absolutely correct in his arithmetic and even foresees what the "boosters" will claim.

jerf2• 4 months ago

I'm at a loss as to how some of these projects got funded in the first place. Anyone funding these should have had the perspective to see that there isn't enough power for them. Anyone funding them should have had the perspective to see that by the time power could come online for even a significant fraction of them, the depreciation and interest costs should have murdered the company trying to do it, especially if their solution to that problem is the oh-so-21st century solution of "solving" the problem of losing money by levering up. It does no good to go out of business entirely in 2027 to make the phat buxx in 2030, which seems to be the best case scenario for this space as a whole.

The other question I have is... who exactly is doing all of 1. Using AI right now 2. Making substantial money on it or getting real value and 3. Capacity constrained? Who is actually going to productively soak up all this capacity? It seems to me that bringing all this stuff online can't really make things much cheaper than they are now because the fixed costs aren't going anywhere, and if anything, trying to jam so many projects through all at once just raises those fixed costs even higher. It's not like they triple data center capacity (and increasing AI capacity by, what, 10x? 20x?), stick them full of AI systems, and into that 10x+ greater AI capacity they can sell it at the prices they are now. Higher capacity would crash the selling price but the costs would be as high or higher than now.

I am at a complete loss as to how the numbers are supposed to work here. You can't build a company in 2026 on the economy and tech infrastructure of 2036 anymore than it worked to build a company in 1999 on the economy and tech infrastructure of 2019, no matter how rosy the numbers look on the projections based on conveniently ignoring the fact the company passes through "death" in a year and half. Everything promised in 1999 happened, but trying to artificially accelerate it onto Wall Street's time line burned money by the billions. I'm sure 2036 will have lots of AI in it, but you can't just spend money to bring it forward 10 years by sheer force of will. It has to happen at its own pace.

simianwords11• 4 months ago

The other question I have is... who exactly is doing all of 1. Using AI right now 2. Making substantial money on it or getting real value and 3. Capacity constrained?

Almost all enterprise users for one. At least from what I have seen it is a massive productivity boost for coding and general research. If the costs were ~4x lower, we would be able to do much much more with them. Building datacenters will reduce the cost because increasing supply would reduce the cost.

It's not like they triple data center capacity (and increasing AI capacity by, what, 10x? 20x?), stick them full of AI systems, and into that 10x+ greater AI capacity they can sell it at the prices they are now. Higher capacity would crash the selling price but the costs would be as high or higher than now.

This is false. Part of the costs are unit costs which are really high margin. I think the margins are around 50% to 60%. By increasing the capacity, the are bound to make even more profit.

But the other part is reflecting the lack of capacity.

jerf2• 4 months ago

"Building datacenters will reduce the cost because increasing supply would reduce the cost."

That's great for us users but I'm talking from the point of view of the people trying to make money on the data centers.

"This is false. Part of the costs are unit costs which are really high margin."

Can you explain how everybody throwing their money at nVidia lowers the costs? When they are already apparently at max capacity?

Everybody trying to build a data center at once raises the costs of the data center. Everyone competing for power has already raised power prices and we've barely begun bringing this stuff online. Everyone demanding multiples of what nVidia is producing means nVidias isn't going to reduce prices any time soon.

Your use of "even more profit" also implies that you think that the AI world is making lots of money? nVidia is making lots of money. To a first approximation, everybody else involved has lost billions. Maybe not Apple. But everyone else you can name is deep in the negative on AI.

array_key_first2• 4 months ago

At least from what I have seen it is a massive productivity boost for coding and general research

Are companies release more software with less developers? If the answer is no, then the productivity has not improved. It might SEEM like it improves because you're able to produce more code and you spend less time programming, but that might not be the case in actuality.

From what I've seen, AI is very good and very popular but it hasn't improved programming productivity in a meaningful way. The bottlenecks are unchanged so writing more code faster doesn't help anything. A lot of companies let a lot of employees go due to AI, and their product velocity has noticably gone down and their quality is noticably worse.

fragmede• 4 months ago

In xAI's case, they've gotten gas turbines installed on site with which to make up the electricity generation shortfall onsite. It's unclear exactly how long that short term solution is going to be there, but probably quite a while.

smitty1e• 4 months ago

The obvious answer to the power problem will be to have the AI design massively parallel exercise bicycle/electrical generator plants that can be powered by all of the people laid off by the AI.

A literal "virtuous cycle", if you will.

kikimora• 4 months ago

Why bicycle? A bath with tubes connected directly to a human body would be much better solution ;)

aziaziazi• 4 months ago

Too much loss and inefficiency. An in vitro ATP fuel cell feed with glucose would be more convenient with the right enzymes… but wait… glucoses will comes from plants and their own ATP uses sunlight as fuel. Replicating that would be much more cost effective than growing plants to feed animal-based ATP. Just as with food, animal intermediaries are inefficient.

consumer4514• 4 months ago

I have already written a comment here, apologies. However, I have something else to say other than a hot take, about Ed Zitron:

I believe that Ed Zitron plays a very important gadlfy role in all of this.

However, if you look at his subreddit, it appears that he has created a 100% AI denier following. My gut makes me worry for them, but I wonder where the truth really lies.

For those of us involved with code, Sonnet 3.5 was a revelation, and Opus 4.5 scared the crap out of many, and converted some of us to believers in "the exponential."

Now, in other verifiable output fields like finance/spreadsheets in general, Claude is scaring even more people.

I really do respect Ed, but I feel like his schtick might make too many people complacent, thinking that this is all fake. Also, I could be wrong.

simianwords11• 4 months ago

My gut makes me worry for them, but I wonder where the truth really lies.

Why worry?

Also I'm pretty sure I have seen a similar comment before

guzfip2• 4 months ago

I think these schizophrenics are stuck in a loop.

consumer4514• 4 months ago

> My gut makes me worry for them, but I wonder where the truth really lies.
Why worry?

Because, instead of telling people that "it's all a bubble," while he might be partially correct, he is still creating a confirmation bubble following. He is creating a denialist community, where as his followers might be best served by learning how to use the tools.

I am not sure about any of this.

Why worry? Because if he is wrong, then there is a chance that we will be killing the animals in our zoos, to feed the people. This is something that really happened during the last "great depression."

I worry about the plight of my fellow man as it affects me.

guzfip2• 4 months ago

Everybody’s lying to me. Haven’t you heard: lying is a virtue now.

Esophagus42• 4 months ago

Sigh.

I see another impassioned, fervent cry daily about how it’s all going to collapse like a house of cards (as if smart money doesn’t know it and some podcaster is the first to realize data centers take a long time to build).

But unless I missed something, I didn’t see him disclose any financial positions that would indicate him betting on the collapse he is so clearly calling for.

I think that should be required to take any of these articles seriously - if your portfolio doesn’t reflect your stated opinions, your stated opinions aren’t what you really believe.

eutropia• 4 months ago

these sorts of "your opinions must be financialized to be valid" takes are the equivalent of the middlebrow dismissal.

"Smart money" is an illusion that only holds up until they do something in an area you're familiar with. Many _many_ financiers know about finances and fuckall about anything else.

The claims and citations in the article stand on their own, without the additional burden of trying to make a bet based on facts in a rigged game based on mob mentality. How does one even bet against private equity data center deals??

Esophagus42• 4 months ago

Billions in data center deals are being done in public markets. It wouldn’t be even remotely hard to bet on. He literally called for NVIDIA GPU spending to decline. He also said he believes the true consequences of AI are the destruction of the tech industry’s software stack.

If he believed any of this, there are myriad opportunities to put his money where his mouth is. But I have a feeling the author doesn’t believe it enough to do so. Which tells me all I need to know about his own opinion of his work.

He used the f- word 11 times to describe a catastrophe in the making. This is engagement bait.

Come on, man. How can you defend someone who wrote this:

every executive forcing their workers to use AI is a ghoul and a dullard, one that doesn’t understand what actual work looks like, likely because they’re a lazy, self-involved prick.

That’s the scion exposing the deep state AI house of cards?

bandrami• 4 months ago

You can really tell who remembers 2008 and who doesn't from comments like this

wavemode2• 4 months ago

Ever heard the phrase "the market can remain irrational for longer than you can remain solvent"?

kristianp• 4 months ago

It makes sense that data centres in the US can't be built at a rate to keep up with the many announcements of new capacity that are happening. It's a worry how obfuscated the numbers are, and that the hyperscalers aren't breaking out the numbers in their statutory reporting.

Its true this article isn't the most concise, but it might not deserve the flagging that people are giving it on here.

random__duck2• 4 months ago

So, who is the grifter here ?

tim333• 4 months ago

I’m comfortable estimating that North American data center absorption — as the IT load of data centers actually turned on and in operation — was at around 3GW for 2025, which would work out to about 3.9GW of total power.
And that number is a fucking disaster.

To me that number is reassuring. I was worried that all this Sam Altman plans to build 12GW per month stuff was going to fry the planet.

If the whole lot so far runs on less than one Zaporizhzhia nuclear power plant then that actually seems kind of reasonable. Also I'm skeptical the path to AGI is ever larger data centers - there seems much that could be done in terms of better algorithms and design. I don't think human brains update every neural connection for each word when training which is probably partly why they get by on 20W rather than 20KW.

random__duck2• 4 months ago

Wait, who should I be routing for ?

The AI Industry Is Lying to You

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